No small thanks to Germany. First the German companies bribed corrupt Greeks to approve useless submarines and tanks (which didn't even work), and then Germany blackmailed Greece by making the many billion euro purchase of new subs a prerequisite of the bailout. Talk about German hyocrisy.

Then Germany freaked out when France announced it was selling jetfighters to Greece at a cut-rate cost (thereby muscling out German companies trying to earn a profit) with German money!!! Hilarious!

Bit of cours ethere is nothign, absolutely nothing about any defense contracts being part of the bail-out in there.

So it is a brazen lie.

That:

>The second boat, Pipinos, was officially launched in February 2007 and is at present going through Greek harbour acceptance trials in Piraeus.

On September 21, 2009 TKMS announced that the contract with the Greek Navy for all four submarines had been cancelled due to country's arrears of more than 520 million Euros. TKMS is now seeking arbitration to resolve the matter.[21][22]

On October 27, 2009 the Greek Ministry of Defence officially confirmed that they intend accepting the three boats built in Greece. The first-of-class boat built in Kiel will not be accepted, and will be offered for sale. Proceeds from the sale will be used to pay the debt to TKMS>

also shows that the squabbling about the quality of the submarines is rather pre crisis. And that th reamining orders are about submarines built in Greece.

The German taxpayer has committed a whole lot of money to bailing out German, French and British banks. The German taxpayer actually got a pretty good deal on that bailout, seeing as the American taxpayer and the other EU countries' taxpayers chipped in with well over half the bailout of the German, French and British banks.

That the bailout was laundered through a compliant Greek government is incidental and irrelevant.

A primary deficit which financed import orders for the German export industries.

As long as Germany wants to keep running a current accounts surplus against Greece, it needs to be willing to pony up the money to finance that surplus, or allow Greece to print that money itself. Insisting that Greece pays for the German current accounts surplus is an exercise in futility. (Also in arbitrary cruelty to Greek society. But we seem to have established that the German version of European solidarity ends when it starts costing money, so that probably doesn't count.)

With bilateral trade worth more than EUR 8.5 billion, Germany is Greece's principal trading partner. German companies are among the most important foreign investors in the country. Over the past two years, Deutsche Telekom has gradually acquired a 40 per cent share in the semi-state-owned Greek telecommunications company OTE. In addition to companies including Siemens and Bayer that have been operating in Greece for many years, there has been a recent increased influx of retail companies like Lidl and Media-Saturn. Major infrastructure projects such as the Athens Metro and the new Athens airport have been conducted with the help of German companies. The 144 German companies operating in Greece employ a total workforce of approximately 37,000 and account for an annual turnover of some EUR 10.5 billion (German Federal Bank figures, as of April 2010).

It has three trading partners who are abusing the European fixed exchange rate system for protectionist gain.

Of those three, one is Germany and the other two (Finland and the Netherland - and Finland's inclusion on this list is actually questionable) are an order of magnitude (and some small change) smaller. As trade scales faster than linearly with size, Germany is well in excess of 80 % of the trade imbalance.

So for all practical purposes, yes, Greece's primary deficit went to German export companies.

The percent of total German exports going to the Euro area as a whole has actually declined since the euro was introduced because the Euro area has grown more slowly than other regions. Germany's bilateral trade balance in goods with each of the GIIPS, however, has improved. For example, Greece's bilateral trade deficit with Germany widened from -1.5 percent of Greece's GDP in 1999 to -2.5 percent in 2008. Other core European countries, like the Netherlands, saw similar developments with the GIIPS, suggesting that all of the surplus countries benefited from increased demand in the weaker Euro area members.

First, rather than providing peripheral countries with a market for their distress goods, the Germans have been enthusiastically selling their manufactured goods to the periphery. According to Eurostat, Germany's trade surplus with the rest of the EU grew from 46.4 billion euro in 2000 to 126.5 billion in 2007. The evolution of Germany's bilateral trade surpluses with the Mediterranean countries is especially revealing. Between 2000 and 2007, Greece's annual trade deficit with Germany grew from 3 billion euro to 5.5 billion, Italy's doubled, from 9.6 billion to 19.6 billion, Spain's almost tripled, from 11 billion to 27.2 billion, and Portugal's quadrupled, from 1 billion to 4.2 billion. Between 2001 and 2009, moreover, Germany saw its final total consumption fall from 78.5 percent of GDP to 74.5 percent. Its gross savings rate increased from less than 19 percent of GDP to almost 26 percent over the same period.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

Greece had a current account trade deficit of 14.9% in 2008. In absolute numbers 51.2 billion $. The trade deficit was 49,1 billion $. Now as big as 2.5% of gdp is, that is not everything and certainly not 80% of the total.

What would have been your attitude in 1953 when Greece forgave 55% of the pre-war debt you owed to Greece (an amount at least as high as the 15 billion Germany has passed through Greece to its own banks) and then, as an additional reward, Germany received massive stimulus funds?

Did Germany suffer the consequences of its decisions then, as you so put it?

You're evading Upstate NY's point that Greece in the postwar years was a theatre for the "Allies" against Communism in a quite different way from West Germany. While West Germany was the poster child, Greece was literally a battleground.

It is questionable whether additional debt really helps Greece. It is precisely the problem that Germany doesn't have enough money to simply give enough money to the PIGS nor the resolve to dissolve the Euro that is causing this prolonged crisis.

It's curious that when it comes to financialization methods meant to line the pockets of bankers, we dream up the most fanciful vehicles. But when it comes to addressing the sovereign debts of nations, it's direct deposits.

I guess most of that is an attempt to avoid naming the dreadful truth. For Greece there are only two significant options. Either unquestioning obediance or an exit from the Euro. Matters have progressed too far to allow anything less radical.

The lie (sold most vehemently of all to the German public) is that austerity measures were every going to put Greece into a position to pay off it's debt.

What was needed was a short sharp ECB intervention at the beginning to show that it wasn't going to tolerate random speculation in Eurozone government bonds - and then an EU-wide dose of fiscal spending to dig Europe out of the worst situation since the Great Depression.

Ever since Austerity was chosen as the policy response, we've been locked into a death spiral. Many on this site (including me) kept hoping that we could break out of that - but the reality is as long as people keep pretending the Austerity could work in the middle of a Lesser Depression, the more doomed we are.